Business and Individual Taxpayers See No Reprieve in New Jersey Tax Package

After weeks of tense budget confrontations threatening a government shutdown, New Jersey lawmakers passed a last-minute $37.4 billion state budget last weekend that included tax hikes on individual and corporate income. As part of the agreement, the top income tax bracket has been increased from 8.97 percent to 10.75 percent on income above $5 million. Businesses earning more than $1 million will also now pay a higher corporate tax rate for the next four years. For the first two years, they will be taxed at 11.5 percent, and at 10.5 percent for the remaining two years, up from the 9 percent current rate. The deal represents a compromise between rival plans by Governor Phil Murphy (D) and Senate President Stephen Sweeney (D). Earlier this year, Sweeney had supported increasing the corporate tax rate from 9 percent to 12 percent for businesses with income above $1 million, while Murphy proposed raising the state’s sales tax and taxes on income above $1 million from 8.97…

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